David Cameron abandons commitment to match Labour spending

David Cameron has abandoned his commitment to match Labour's public spending plans after 2010.

The Conservative leader said that the Government must pledge to reduce planned increases in public spending in next week's pre-budget report. Although stopping short of calling for cuts in the total amount of public spending, Mr Cameron believes the rate of growth should be reduced.

He accused Gordon Brown and Alistair Darling, the Chancellor, of building up a "borrowing bombshell" during the forthcoming recession.

Labour have insisted that it is necessary to maintain public spending - and possibly increase it - to help boost the economy during the downturn.

However, Mr Cameron has rejected this argument. He has ordered his shadow cabinet to carefully study Whitehall budgets and find potential savings. A team of Conservatives is understood to be looking at how spending has been cut recently in New York.

Mr Cameron accuses Labour of running up a massive deficit in the public finances that has left Britain ill-prepared. The Conservative leader said that further planned increases in Britain's borrowing risked creating a major future problem in the country's public finances. He estimates that the typical taxpayer faces a £1,500 rise in taxes to pay for the increased borrowing.

The announcement to abandon Labour's public spending targets will please many in the Conservative Party. Mr Cameron and George Osborne, the shadow chancellor, have been under pressure to change the Conservative economic policy to prepare for recession. However, they may still face criticism that the plan does not come into effect until 2010 and that imminent tax cuts are still not being promised.

Mr Brown is expected to announce sweeping tax cuts in next week's pre-budget report. The cuts will be funded by increased Government borrowing. The Government says that other countries around the world are all implementing similar "fiscal stimulus" packages.